Make your Donations with Confidence – Five Questions to Ask

Nonprofits are asking for support more than ever this time of year. So many groups seem worthy. How can you feel sure you’re making a good decision when you write a check or make a grant?

Knowing the answers to a few basic questions can boost your confidence that you’re making a good choice. In our experience, the most effective organizations make it easy to answer:

What are they trying to achieve?Short-term and long-term. Is the organization meeting a real and pressing need? Is their vision clear? Realistic? Is their vision ambitious enough for you? Are their goals consistent with the organization’s mission? Do you get excited about their goals?

Does their approach make sense? At the very least! Is the organization’s approach logical for the context in which it’s working? Do they factor in local realities and the perspectives of their beneficiaries? Does their approach promise significant or potential impact relative the resources they spend? Do they take advantage of the progress and lessons learned by others in the field (nonprofits, government programs, private companies, etc.).

What evidence suggests the initiative will be successful? How does the nonprofit know if it’s making progress toward its goals? How does it evaluate itself? What data have they tracked in the past? What mechanisms do they have for adapting their strategies as they learn? What types of research or evaluation do other funders use to make the case for supporting the organization?

Do you trust the organization’s leaders? Both the board and staff? This is an essential question for Angel and VC investors – and it should be for folks making grant “investments” as well. Vision and good intentions aren’t enough. Ideas and strategy are only as good as the team that executes on them. How do others in their field view these leaders? How are they seen by their own teams? What have they demonstrated they can accomplish?

Will the organization have the resources to reach its goals? Your donation or grant is an “investment” to accomplish a result in the future, so you need to have faith in the organization’s current and future financial picture. Equally important, as external factors change, will the organization be able to count on the other actors it needs to get the job done, the community, other nonprofit or government partners or beneficiaries?

Sometimes these questions are easy to answer. Sometimes other funders with experience in the specific topic or community provide key insights. Other times a third-party acting on behalf of a donor, anonymous or named, can learn more. And sometimes donors decide to fund projects despite not having the answers to all of these questions… because it’s a process of getting to know an organization.

In the spirit of Socrates… there’s no right answer but it’s worth asking the questions.